In a major crackdown on digital lending platforms engaging in illegal practices, the central bank revoked the licenses of five non-bank financial companies (NBFCs) citing “improper lending practices”. The Reserve Bank of India (RBI) says the Certificate of Registration (CoR) issued to the five NBFCs is canceled due to breach of RBI guidelines on outsourcing and code of fair practices in their digital lending operations . These companies were undertaking operations through third-party apps, which was seen as detrimental to the public interest, the central bank said.
The NBFCs whose license was canceled are UMB Securities Ltd, based in Bangalore, Anashri Finvest Ltd, based in Bengaluru, Chadha Finance Private Ltd, based in New Delhi, Alexcy Tracon Pvt Ltd, based in Kolkata, and Jhuria Financial Services Private Limited , based in Guwahati.
These companies operated as Fastapp Technologies Pvt Ltd, Datimes Pvt Ltd, Bullintech Finance Pvt Ltd, TGHY Trustrock Pvt Ltd, Mrupee, Kush Cash, Karna Loan, Mr Cash, FlyCash, Wifi Cash, Badabro, Aeritech, Finclub Technologies , MoNeed, MoMo, CashFish, Kredipe, RupeeLand and Rupee Master.
The RBI said the firms flouted its existing rules on charging excessive interest and resorted to “undue harassment” of customers for loan recovery purposes.
“As such, the above companies shall not carry on the business of a Non-Banking Financial Institution (NBFI), as defined in subparagraph (a) of Section 45-I of the RBI Act of 1934,” the central bank said.